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wayne lancaster's Advice

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wayne lancaster wrote:

Pre-approval question - buying and selling

Answer
It is important that you get pre-approved prior to putting your current home on the market.  If your plan is to coincide the closing with a new purchase, then that scenario will be taken in to consideration by your lender. You need to know your options upfront, and a pre-approval (a pre-qualification is worthless) will give you assurance to hopefully proceed. You can find local Lenders on Find a Pro tab at top of this page.
April 10
(0)

Possible job change before closing

Answer
The lender's gave you pertinent input - Tim did not. Unless you can get an Employment Contract that is a binding agreement with details of employment, date of employment, income, etc the need for a 30 day paystub is likely to apply.At closing you will be required to sign a statement certifying that your employment or financial position has not changed from your loan application details. It would be mortgage fraud to sign the document if facts are not true.  There will also be a verbal verification of employment with your current employer a few days prior to closing. The only way to handle this is to have a discussion with your lender, and determine what options are available including starting new job earlier, delaying closing, paystub prior to first payment, etc.
April 10
(2)

Should Refinance out of my FHA to a higher interest rate conventional?

Answer
If you plan on owning property for 5 yrs or more and the property value is $270K+, then refinancing and eliminating MI would be a good option. Your rate on a conventional refinance would be obviously higher than 3.75% but there would still be a savings of $140 or more monthly if you didn't roll closing cost into the new loan. Your current FHA MI would not come off for 5 yrs min - 2017, and likely to be several more yrs after that to attain 78% of original loan balance.Contact a local lender on Zillow and get a comparison.
April 04
(0)

How much money do I need?

Answer
Though FHA only has a 3.5% min down payment requirement, it also has a 1.35% Monthly mortgage ins premium.  That is about double what the MI could be on a 5% down conventional loan. It would be worthwhile to discuss the advantages of a conventional loan with a local lender.
April 04
(1)

What is the difference between a pre-qualified vs pre-approved mortgage?

Answer
A pre qualification is a conversation - a pre approval is a confirmation. Anyone asking for or issuing a pre qualification is wasting everyone's time. It should have disappeared with sub prime lending but consumers, agents, and even lenders continue to use the term; and worse use the form.  If a consumer is serious about buying a home, they should only request a pre approval letter. If a loan officer wants to maintain a professional reputation, they should only deal with issuing pre approval letters.  If an Realtor wants to earn future referrals and represent the best interest of the consumer, they should only show properties to prospect that have a valid pre approval letter.The difference is very significant contrary to what others have said. It is getting copies of paystubs, W2s, first 3 pages of recent tax return, latest bank/asset statement, preliminary application with job history, copy of other documentation i.e divorce decree if child support is applicable, and any other documentation needed to underwrite the file; along with credit report - and explanations - and automated underwriting approval.It would make me happy, if I never heard pre qualification mentioned as an option in the mortgage/real estate industry.
April 01
(1)

Newly employed college student "ready" to buy

Answer
Congratulations on spending the time and effort by saving substantial funds in preparation for home ownership.  The next step is to contact a local lender for assistance in the pre approval process.  2 yrs of employment should not be an issue as time in college could be in lieu of work history. Closing credit card accts is not a prudent approach as it negatively impacts credit scores. Bottom line is an experienced loan officer can guide you through the pre approval/purchase process.
March 31
(0)

I heard that my car payment wont count on dti if less than 12 mths to pay off, true?

Answer
FHA says that installment debt of 10 months or less will count if amount may impact borrowers ability to repay the mortgage during the initial stages of the mortgage. Generally that is interpeted to mean $100 or more monthly.  On conventional loans it has been typical not to count installement debt of less than 10 months, but the determining factor is now what the automated underwriting states.
March 30
(0)

Trying to get PMI lifted based on market value - mortgage company unhelpful

Answer
Randy gave good input - Josh did not. Depending on loan balance, current rate, and monthly PMI amount, it may be worthwhile to consider refinancing vs waiting 5 yrs (if that is part of PMI agreement).  Divide refinance cost into monthly savings to determine months to pay back. If you plan to be in property 2-3 yrs + beyond pay back period it would be worth having loan officer do the #s for you. Click on my picture, and contact me if you would like assistance. 
March 29
(0)

Having bad experience in pre-qual, please advise.

Best Answer
Though you state that you will no longer reply to your post, let me address my comments to prospective home buyers that may read this. Getting pre approved is a critical part of the mortgage process, and there is only one way to achieve it. Discuss with loan officer your financial scenario, fill out a worksheet provided by lender, and supply copies of paystub, W2s, last bank statement, and first 3 pages of most recent tax return. Lender will run a credit report, ask quesiton of documentation received or additional documentation, and then run  automated Underwriting for an approval. With an approval, the loan officer can issue a meaniful and accurate pre approval letter.  Any short cuts results in "garbage in - garbage out', and potential for big surprises and disappointment for borrower, seller, and agents.A borrower, agent or seller should not even considering proceeding with a pre qualification letter. It is good way to get your offer refused, and watch other prospects have their offers with a pre approval letter accepted. There is no 'old school - new school" loan officers, only those that are professional and experienced to do what is required in this mortgage environment to make sure a borrower meets investor guidelines.
March 28
(2)

Should I refinance from FHA to conventional to get rid of mortgage insurance?

Answer
If you can refinance at 4.375% with no MI, it is a viable option if you plan to be in the property for 4-5 yrs or more. I assume your loan balance is about $165K with 1.25% MIP currently. If you save $120 a month it would take 34 months to pay back refinance cost of $4K, which makes time you plan to own property less of an issue if long term.
March 28
(0)